Owner And Principal Of Investment Firm Found Guilty Of Insider Trading And Investment Fraud Scheme

 

 Audrey Strauss, the United States Attorney for the Southern District of New York, announced today that, following a two-week trial presided over by U.S. District Judge Edgardo Ramos, and approximately one hour of deliberations, DONALD BLAKSTAD, the owner and principal of a California-based investment firm, was found guilty on all counts for committing insider trading and a securities offering fraud scheme.  BLAKSTAD’s offenses yielded more than $7 million in criminal profits. 

U.S. Attorney Audrey Strauss said:  “As a unanimous jury found, Donald Blakstad used his connections to a company insider to gather inside information that he and his associates then traded on, raking in more than $6 million in illegal profits.  In addition, Blakstad defrauded investor clients out of more $1 million, funds he purported would be invested but he instead misappropriated, in some cases for personal expenses.  Now Donald Blakstad awaits sentencing for his crimes.”

According to the allegations contained in the Indictment and the evidence presented at trial:

BLAKSTAD was a stock trader and the owner and principal of an investment fund known as Midcontinental Petroleum Inc. (“Midcontinental Petroleum”), which purported to be in the business of soliciting investments in the energy industry.  Martha Bustos was a former certified public accountant who worked in the finance department at Illumina, Inc. (“Illumina”), a San Diego-based biotechnology company whose securities trade on NASDAQ.  By virtue of her employment at Illumina, Bustos had access to material nonpublic information about Illumina’s financial condition, including its earnings. 

On several occasions, from 2016 through 2018, BLAKSTAD obtained inside information about Illumina’s financial condition from Bustos before Illumina publicly announced its earnings and financial results.  As BLAKSTAD knew, Bustos owed a duty to keep inside information about Illumina confidential. 

BLAKSTAD, aware of Bustos’s breach of duty to Illumina, used this inside information to make profitable trades in Illumina securities shortly before Illumina’s earnings announcements.  At times, BLAKSTAD tipped his associates so that they could trade Illumina stock and options based on the inside information.  At other times, in order to avoid detection, BLAKSTAD arranged for his associates to purchase Illumina securities for BLAKSTAD’s benefit in accounts controlled by his associates. 

Following the public announcement of Illumina’s earnings, BLAKSTAD and his associates sold the Illumina securities at a significant profit, sometimes exceeding more than 2,000 percent.  In total, BLAKSTAD and his associates made more than $6 million in profits from purchasing and selling Illumina securities. 

In addition, from at least in or about 2015 through at least in or about 2019, BLAKSTAD devised and operated a securities offering fraud to fraudulently obtain more than a $1 million from a number of investors.  BLAKSTAD fraudulently induced victim investors to make up-front, lump-sum investments for securities issued by Midcontinental Petroleum, which funds BLAKSTAD then misappropriated, in substantial part. 

To facilitate the scheme, BLAKSTAD made false and misleading representations to investor victims regarding how their investment funds would be utilized.  During the scheme, at BLAKSTAD’s direction, victims transmitted their funds, including by wire transfer, into bank accounts that were controlled by BLAKSTAD.  Once he obtained these investor funds, BLAKSTAD did not use them for the purposes he had represented to investors.  Instead, BLAKSTAD diverted a substantial portion of victims’ funds to himself and to co-conspirators.  For example, BLAKSTAD used the funds to pay for a variety of personal expenses and for purposes that were unrelated to the business of Midcontinental Petroleum. 

BLAKSTAD also made a series of false and misleading statements to victims designed to avoid detection, perpetuate the scheme, and keep the victim funds he received as a result of the fraud.   

BLAKSTAD, 62, of San Diego, California, was convicted on all counts of the Indictment.  He was convicted of one count of conspiracy to commit securities fraud, two counts of securities fraud, one count of conspiracy to commit wire fraud, and one count of wire fraud for his participation in the insider trading scheme.  He was also convicted of one count of conspiracy to commit securities fraud and wire fraud and one count of wire fraud for his participation in the securities offering fraud scheme.  The securities fraud counts and the conspiracy to commit wire fraud count each carry a maximum sentence of 20 years in prison.  The conspiracy to commit securities fraud and the conspiracy to commit securities fraud and wire fraud counts each carry a maximum term of five years in prison.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by the Court.

BLAKSTAD is scheduled to be sentenced before Judge Ramos, who presided over the trial, on October 28, 2021, at 11:00 a.m. 

Bustos pled guilty in June 2019 for her participation in the insider trading scheme.  Bustos, who is cooperating with the Government, has yet to be sentenced.

Ms. Strauss praised the outstanding investigative work of the Federal Bureau of Investigation.  Ms. Strauss also thanked the Securities and Exchange Commission, which brought a separate civil action. 

Representative Adriano Espaillat Announces Nearly $2 Million Funding to Upper Manhattan Empowerment Zone (UMEZ)

 

Funding to Help Support Continued Small Business Recovery in the District

 Representative Adriano Espaillat announced  a combined $2.48 million to the Upper Manhattan Empowerment Zone - UMEZ ($1.826 million) and Business Resource & Investment Service Center ($658k) through the New York Public Library allocated through the U.S. Treasury CDFI Fund. 

UMEZ received the maximum award amount under the Rapid Response program, which was part of a $1.25 billion award to more than 800 CDFIs. These funds will help provide flexible support to small businesses in throughout New York’s 13^th congressional district to assist with ongoing recovery efforts following the COVID-19 pandemic.

"Over the course of the pandemic, my office worked with hundreds of small businesses from my district, helping owners apply and access funding allocated through federal legislation to help keep businesses open during this time of great need,” said Rep. Adriano Espaillat. “The Upper Manhattan Empowerment Zone (UMEZ) is a true partner to small businesses in New York City and has been instrumental in the community as a whole helping businesses run and thrive and this funding will help provide a critical investment in the program to continue its efforts to help businesses re-build better and stronger from this pandemic. I am delighted that UMEZ has been recognized as such a valuable community partner and look forward to working with President and CEO Duncan and the entire UMEZ team to continue to support small businesses in the district and help them recover.”

“These federal economic relief funds, a combined $2.48 million—UMEZ $1,826,265 and BRISC $658,000—from the U.S. Treasury’s CDFI Rapid Response Program, will enable UMEZ and BRISC to continue to develop the types of programs that further strengthen small businesses in our Upper Manhattan communities,” said Blair M. Duncan, president and CEO of UMEZ. “We thank Congressman Espaillat and his team for quickly assisting us to navigate the U.S. General Services Administration’s registration process, so UMEZ and BRISC could apply for these federal funds designed for communities like ours. His office’s responsiveness enabled us to submit under a tight deadline.”

UMEZ works to sustain the economic revitalization of all communities in Upper Manhattan through job creation, corporate alliances, strategic investments, and small business assistance. Through its programs, UMEZ has facilitated economic support and development in the neighborhoods of Central, West, and East Harlem; Washington Heights; and Inwood.

Governor Cuomo Announces $11.2 Million for Supportive Housing Projects and Emergency Shelter Repairs across the State

 

Homeless Housing and Assistance Program Funding to Create 127 Units of Supportive Housing

Funding Will Also Help Three Homeless Shelters to Perform Necessary Repairs

 Governor Andrew M. Cuomo today announced that $11.2 million in state funding has been awarded to six projects that will provide supportive housing or emergency shelter to New Yorkers experiencing homelessness. Supported through New York State's Homeless Housing and Assistance Program, these projects will create 127 units of permanent supportive housing and assist three emergency shelters in performing needed repairs.

"As we build back our state better than it was before, we must focus on helping our most vulnerable New Yorkers who have suffered so much during this pandemic," Governor Cuomo said. "These projects, like many others supported by this critical program, will provide New Yorkers experiencing homelessness or housing instability with the safe shelter, supportive services and stable housing they need, furthering our efforts to create a stronger, more inclusive New York."

Administered by the state Office of Temporary and Disability Assistance, the Homeless Housing and Assistance Program will provide $6.9 million to the Bridge, Inc. to construct Bishop House Apartments, a nine-story 88-unit building in Central Harlem that will offer 71 units of supportive housing to serve individuals with severe mental illness or who are reentering the community after incarceration. The Bridge will provide case management, daily living skill and vocational training, substance use treatment, and physical and mental health care services.

The program will provide $4 million to construct Jericho House, a 56-unit supportive housing development in New York City serving adults with substance use disorder who are experiencing homelessness. Services provided by the Jericho Project include case management, crisis intervention, relapse prevention, career counseling, job readiness and substance use treatment.

In addition, the approved funding will provide a total of $255,000 to four emergency shelters to conduct repairs. These shelters include Caring for the Hungry & Homeless in the Westchester County town of Peekskill; St. Catherine's Center for Children's Marillac Family Shelter in the city of Albany; and two awards to the Soul Savings Station for Every Nation's Mother Anderson, one for their family shelter, and one for single individuals, both in the city of Saratoga Springs.

OTDA Commissioner Mike Hein said, "Emergency shelters and permanent supportive housing both play a critical role in helping New Yorkers who experience homelessness on the path to achieving lasting stability. Likewise, these projects each play an important role in ensuring their respective communities have the necessary resources to provide safe shelter to individuals experiencing homelessness as they address the root causes of their housing instability. I commend Governor Cuomo for redoubling the support for this program and our efforts to end homelessness in New York once and for all."

The Homeless Housing and Assistance Program made available $128 million in capital funding for projects proposing to build supportive housing units or to repair emergency shelters. Already during this funding cycle, the program has allocated nearly $12 million to six projects that will add 127 units of supportive housing and repair emergency shelters throughout the state. Last year, the program provided funding to 30 projects that will add 881 units of supportive housing and repair emergency shelters.

The awards reflect Governor Cuomo's continued efforts to provide all New Yorkers with access to safe, affordable housing, which is reflected in the state's unprecedented $20 billion housing plan. So far, the plan has helped to build or preserve 7,000 units of supportive housing across the state, putting the state well on the way to achieving the goal of 15,000 created or preserved over 15 years.

Building on his commitment, the Governor's 2021 state budget increased the available capital for the Homeless Housing and Assistance Program from $64 million to $128 million - a funding level that was maintained in the enacted 2022 budget. This funding includes $5 million earmarked for supportive housing for homeless veterans; $5 million for supportive housing for individuals with AIDS who are experiencing homelessness; and $1 million for necessary repairs to emergency shelters.

The Homeless Housing Assistance Program provides capital grants and loans to not-for-profit corporations, charitable and religious organizations, and municipalities to acquire, construct, or rehabilitate housing for persons who are unable to secure adequate housing without special assistance. The grants are awarded through a competitive process by the New York State Homeless Housing and Assistance Corporation, a public benefit corporation staffed by OTDA.

Through this program, New York State has appropriated more than $1.2 billion toward the development of supportive housing. In total, the program has created more than 22,000 units of housing to support individuals and families experiencing homelessness.

187 Days and counting

 

School is out, but we want your child to come to 'Summer Learning', and this year we did not just make it for failing, I mean struggling students. We made it for all students, since we know some students are behind in their studies, especially those children in Bronx public schools whose student performance level is mush lower than the other four boroughs. so sign your child up for our 'Summer Learning' program, again especially if your child goes to a Bronx public school.

I've heard grumblings about sending extra police to protect the tourist in Times Square. They will be cracking down on street vendors who are not licensed, those squeegee guys who have come back from the Giuliani days, and the aggressive pan handlers who are harassing the tourists. We need to make Times Square safe for the tourist who come to visit New York City. Isn't that right Commissioner Harrison, I mean Chief Harrison?

MAYOR DE BLASIO AND THE TRUST FOR GOVERNORS ISLAND ANNOUNCE GLOBAL COMPETITION TO ESTABLISH LEADING CLIMATE SOLUTIONS CENTER IN NEW YORK CITY

Request for Expressions of Interest seeks a partner to anchor climate research, educational hub on iconic island

 

$150 million funding commitment available to support capital investments

 Mayor Bill de Blasio and The Trust for Governors Island (the Trust) today launched a global competition to create a climate-focused research and educational hub on Governors Island. The competition invites universities and research institutions to establish an anchor institution for a Climate Solutions Center, dedicated to combatting the climate crisis in the heart of New York City’s harbor. The Request for Expressions of Interest (RFEI) can be found here.

 

The Center will capitalize on New York City’s unique talent pool to prepare communities around the world for the impacts of climate change; create good-paying green jobs across the city; and foster public awareness, dialogue, and action to address the global climate crisis.

 

“Governors Island is a crown jewel of this city – a place where families, workers and students have come to enjoy a beautiful landscape with spectacular views of the greatest city in the world. But we can get more out of this unique space. We can maintain the island’s identity while turning it into a world-class destination for fighting the climate crisis in New York City and across the world. That journey starts today, and I can’t wait to see where it takes us,” said Mayor Bill de Blasio.

 

“New York City has every asset needed to become the global leader in climate solutions and adaptation. We have the best talent, most innovative and creative entrepreneurs, and now, we’re offering Governors Island as the ideal location to host this existential work,” said Deputy Mayor Vicki Been. “This competition will foster diverse ideas and perspectives on how to create a world-class climate solutions center, and I look forward to seeing institutions from across the globe propose concepts for this once-in-a-generation opportunity.”

 

“As our city emerges from the COVID-19 crisis, we have a critical opportunity to address the global climate crisis in a way that centers equity, prepares our communities, and involves all New Yorkers in creating solutions,” said Clare Newman, President and CEO of the Trust for Governors Island. “Situated at the center of New York Harbor, and at the center of New York City’s global network of talent, institutions, businesses and leaders in climate action, Governors Island offers a visible platform for education, research and public engagement to address one of the defining challenges of our time. We look forward to working with prospective partners to define this important project for Governors Island, and our city.”

 

“Just as the United Nations was persuaded to locate its headquarters here three-quarters of a century ago, today marks an important step in bringing a world-class institution to New York City to address the defining issue of our time – climate change,” said Alicia Glen, Chair of the Trust for Governors Island. “As we seek to combat the devastating impacts of climate change on our communities, this RFEI acknowledges and builds upon our history as the global center for innovation and progress.”

 

The RFEI seeks an institution to lease land within 33 acres of development sites, and/or up to one million square feet of adaptive reuse opportunity available within historic buildings on Governors Island. The Trust and the City of New York have partnered to make available up to $150 million of capital funding that may be allocated to support this project.

  

Governor Cuomo Updates New Yorkers on State's Progress Combating COVID-19

 

Statewide 7-Day Average Positivity is 0.39%

24,746 Vaccine Doses Administered Over Last 24 Hours

3 COVID-19 Deaths Statewide Yesterday—Fewest Since September 28, 2020 

 Governor Andrew M. Cuomo today updated New Yorkers on the state's progress combating COVID-19.

"Our state has come a long way in beating back this virus, but our work continues because we need to get every New Yorker vaccinated," Governor Cuomo said. "Every shot in the arm brings us closer to defeating this beast once and for all, which is why we are continuing to work with our local partners across the state to make sure the vaccine is accessible in every community. If you still need to get your shot, I urge you to do so quickly because it's the best way to protect yourself and everyone else you care about." 

Today's data is summarized briefly below:

• Test Results Reported - 55,334
• Total Positive - 290
• Percent Positive - 0.52%
• 7-Day Average Percent Positive - 0.39%
• Patient Hospitalization - 346 (+16)
• Patients Newly Admitted - 55
• Patients in ICU - 89 (4)
• Patients in ICU with Intubation - 42 (-1) 
• Total Discharges - 184,745 (52)
• Deaths - 3
• Total Deaths - 42,964
• Total vaccine doses administered - 21,046,333 
• Total vaccine doses administered over past 24 hours - 24,746
• Total vaccine doses administered over past 7 days - 440,607 
• Percent of New Yorkers ages 18 and older with at least one vaccine dose - 69.2%
• Percent of New Yorkers ages 18 and older with completed vaccine series - 63.5%
• Percent of New Yorkers ages 18 and older with at least one vaccine dose (CDC) - 71.9%
• Percent of New Yorkers ages 18 and older with completed vaccine series (CDC) - 65.0%
• Percent of all New Yorkers with at least one vaccine dose - 57.4%
• Percent of all New Yorkers with completed vaccine series - 52.4%
• Percent of all New Yorkers with at least one vaccine dose (CDC) - 59.7%
• Percent of all New Yorkers with completed vaccine series (CDC) - 53.7%

Attorney General James Calls on Congress to Protect Consumers by Providing FTC with Much-Needed Tools

 

 New York Attorney General Letitia James, today, co-led a bipartisan coalition of 28 attorneys general from around the nation in taking action to support the ability of the Federal Trade Commission (FTC) to successfully combat fraudulent and anticompetitive conduct. In a letter to congressional leaders, Attorneys General James and the coalition express their strong support for the Consumer Protection and Recovery Act (H.R. 2668), which would ensure the ability of the FTC to obtain equitable monetary relief, including restitution for consumers and disgorgement of ill-gotten gains, after a U.S. Supreme Court decision stripped the agency of its ability earlier this year. 

“As a result of the COVID-19 pandemic, many consumers are more financially vulnerable than ever before and rely on federal and state enforcers to protect their interests and return their hard-earned money when they have been defrauded,” said Attorney General James. “If the FTC does not have the ability to obtain monetary relief and redress harms, consumers will be the ones who lose out. Our federal partners at the FTC are vital in the fight to protect consumers, which is why I urge Congress to support consumers and honest businesses by restoring these essential enforcement tools.”

For 40 years, the FTC was able to obtain equitable monetary relief by suing wrongdoers in district court, rather than engaging in a lengthy administrative proceeding. In fact, in the last five years alone, the FTC successfully recovered over $11.2 billion in refunds for consumers through court actions. But this all changed with the Supreme Court’s April 2021 decision in AMG Capital Management, LLC, et al. v. Federal Trade Commission, which limited the ability of the FTC to recover money for injured consumers.

The FTC is an important partner to states as they police anticompetitive, unfair, and deceptive trade practices. The lack of authority to seek equitable monetary relief — directly in court proceedings — undermines the FTC’s efforts to combat unfair and deceptive practices. As the coalition makes clear, in their letter today, this, in turn, frustrates federal-state collaboration and forces states to divert resources away from other consumer protection efforts and perform duties that were previously fulfilled by the FTC. 

Unfair and deceptive trade practices are a serious problem in the United States and the coronavirus disease 2019 (COVID-19) pandemic has led to an uptick in consumer complaints. Likewise, unfair competitive practices have dire and adverse impacts on consumers and businesses. Monopolization, collusion, and other unlawful conduct threaten the proper functioning of the American marketplace and cost consumers and honest businesses billions of dollars each year. Curtailing the remedies available to the FTC enables bad actors to keep their ill-gotten gains, thereby emboldening wrongdoers and incentivizing unlawful conduct.

Joining Attorney General James in co-leading today’s letter is Colorado Attorney General Phil Weiser. The two were joined by the attorneys general of Alaska, California, Connecticut, Delaware, Hawaii, Idaho, Illinois, Iowa, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, Washington, Wisconsin, and the District of Columbia, as well as the executive director of the Hawaii Office for Consumer Protection.

Bank Employee Pleads Guilty To Defrauding Her Employer Of Nearly $1.7 Million

 

 Audrey Strauss, the United States Attorney for the Southern District of New York, announced that GANGADAI RAMPERSAUD AZIM, a/k/a “Julie Azim,” pled guilty today to a more than decade-long conspiracy to commit bank fraud, defrauding her employer, a Manhattan-based bank, by misappropriating approximately $1.7 million.  AZIM pled guilty before U.S. District Judge Katherine Polk Failla.

Manhattan U.S. Attorney Audrey Strauss said:  “As she admitted today, Gangadai Azim betrayed her position as a trusted bank employee to defraud the bank and misappropriate nearly $1.7 million in client funds over the course of more than a dozen years.  Now Azim awaits sentencing for her crime.”

According to the allegations in the Complaint, court filings, and statements made during plea proceedings:

Between August 2008 and January 2021, AZIM, a long-time employee of a New York, New York-based bank (“Bank-1”), stole approximately $1.7 million from her employer.  Over the course of approximately 12 years, AZIM executed hundreds of wire transfers of Bank-1 funds to co-conspirators and related companies, who then sent portions of the ill-gotten funds to AZIM’s personal bank account. 

In furtherance of her scheme to defraud Bank-1, AZIM repeatedly made false entries in Bank-1’s systems, misappropriating funds paid to Bank-1 by its clients to satisfy outstanding loan obligations and then extending the maturity dates of those loan obligations, making it appear as though the loan obligations had not yet been paid.  When even the fraudulently extended maturity dates came due, AZIM originated new, fraudulent loans to help conceal the scheme.  AZIM utilized the proceeds of those fraudulent loans to satisfy the loans for which she had previously stolen the client payments.  Over the course of the approximately 12 years, AZIM caused approximately 200 improper wire transfers of Bank-1’s funds, each for an amount under $10,000,  to be sent to third party accounts, including those of co-conspirators and related companies, which then returned portions of those funds to AZIM.  In doing so, AZIM abused her position at Bank-1 and enriched herself at the expense of her employer.   

AZIM, 58, of Richmond Hill, New York, pled guilty to one count of conspiring to commit bank fraud, in violation of 18 U.S.C. §1349, which carries a maximum sentence of 30 years in prison.  The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

AZIM is scheduled to be sentenced by Judge Failla on October 19, 2021, at 3:30 p.m.

Ms. Strauss praised the outstanding investigative work of the Federal Bureau of Investigation in this case.